Britain's Liberal Democrats outline deficit reduction plans

Reuters Staff

2 Min Read

LONDON, Feb 5 (Reuters) - Britain’s Liberal Democrats on Thursday set out plans to use an equal mix of spending cuts and tax changes to wipe out the budget deficit if they are included as junior partners in a possible coalition after a May national election.

Along with Prime Minister David Cameron’s Conservative Party, the Liberal Democrats share a long-stated aim to eliminate the deficit in day-to-day spending by 2017/18.

Official estimates show that requires 30 billion pounds ($46 billion) of spending cuts and tax hikes annually. Conservative finance minister George Osborne has said he wants to achieve that by cutting welfare and other spending, without raising taxes.

Liberal Democrat leader Nick Clegg says Osborne’s approach is unbalanced, setting out his own plans which fall between those of the Conservatives and the opposition Labour Party - with one of whom Clegg hopes to strike a coalition deal after the vote.

“It is incomprehensible to most people that you would try and balance the books without asking for a contribution from the wealthiest people in our country,” Clegg, the deputy prime minister, said.

He said the party would meet the target by increasing tax revenues by 14 billion pounds, by raising taxes and by clamping down on tax avoidance, and 16 billion in spending cuts, achieved by trimming 4 billion from the welfare budget and 12 billion from other government departmental budgets.

Neither the spending cuts nor the tax changes were fully detailed, but the party pledged to spell out all the changes except the departmental spending cuts before the May 7 vote. (Reporting by William James; Editing by Louise Ireland)